Land Rent

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Description

The Land Rent Scheme is part of the ACT Government's Affordable Housing Action Plan. The Land Rent Scheme gives a lessee the option of renting land through a land rent lease rather than purchasing the land to build a home.

The Land Rent Act 2008 (external site) is administered under the Taxation Administration Act 1999.

Under the scheme, purchasers of a single dwelling residential block (previously unleased land) sold by the Land Development Agency (LDA) have the option of applying for the crown lease to be issued as a land rent lease.  The advantage for potential lessees in taking up this option is the reduction of the up-front costs associated with owning a house. That is, lessees will not need to finance the cost of the land, only the costs associated with the transfer of the land (such as duty) and the construction of the home.

Land rented under a land rent lease is subject to payment of an annual land rent charge. In addition, the lessee will be liable to duty on the grant of the land rent lease, rates, and, if applicable, land tax.Duty is payable on the land rent lease on the same basis as applies to the grant of a nominal crown lease. The dutiable value is not reduced by virtue of the lessees taking a land rent option.

Applicants for a land rent lease are encouraged to seek independent legal and financial advice on the Scheme.

For further information on the Land Rent Scheme see the Land Rent Lease Information Sheet [RTF, 80Kb], [PDF, 419Kb].

The eligibility criteria under the Land Rent Scheme vary depending on the date the transaction to purchase the property was entered into.

Changes to the Land Rent Scheme

As of 1 October 2013, entrance to the Land Rent Scheme is restricted to low to moderate income households eligible for the discount land rent rate of 2 per cent.  The standard 4 per cent rate of land rent will no longer be available to new entrants to the Scheme (that is, entrants who obtain a land rent block where the land rent Crown lease is first granted under a contract entered into on or after 1 October 2013).

All lessees who are already in the Scheme prior to 1 October 2013 will be unaffected by these changes.  Those lessees who exchanged contracts with the Land Development Agency for a land rent block prior to 1 October 2013, but have not yet settled on the purchase, are considered to be pre-1 October 2013 entrants to the Scheme.

Participants already in the Land Rent Scheme, where the initial Crown lease was first granted under a contract entered into prior to 1 October 2013, are not restricted in any subsequent (secondary) transfer of the lease.  However, for land rent Crown leases first granted under a contract entered into on or after 1 October 2013, any subsequent (secondary) transfer of that lease must be to another purchaser who meets the determined criteria and is eligible for the discount rate of land rent.

If a lessee who has settled on a land rent block converts the land rent lease to a nominal rent lease (either at the time of on-sale or earlier), the restriction on transfer will not apply.

Applying for Land Rent

Before settlement on a land rent block, applicants must provide the ACT Revenue Office with an Application for Discounted Land Rent together with evidence that the total gross household income for the previous year is below the relevant threshold amount.

Applicants for a land rent block must also attend a CIT information session (external site) (see below for details).  Once applicants have attended this course, they must submit the Acknowledging Attendance statement to the LDA.  For land rent block availability, sales events and further information, please contact the Land Development Agency (external site).

Application Processing Time – All Applications

The current standard for processing applications is 10 working days from the provision of all required documentation.  Please allow 10 working days before checking on the status of your application. Incomplete applications will delay processing time.

Annual Land Rent Increases

To protect lessees from large rental increases attributable to increases in unimproved land values, annual rent increases will be capped by wages growth.  Land rent is an annual charge billed quarterly; however, lessees have the option of paying weekly, fortnightly, monthly or quarterly.

Conversion of Entitlement

Lessees have the option of converting the land rent lease to a nominal crown lease at any time.  The amount payable to convert the lease from a land rent lease to a nominal crown lease will be based on the unimproved market value of the land at the time of conversion i.e. not the original value when the land rent lease was entered into.  Land rent payments do not contribute towards the amount required to convert the lease from a land rent lease to a nominal crown lease.

Should you wish to purchase the land rent block from the Government, you should contact the Environment and Planning Directorate (external site) for further information. Please note that there may be fees associated with this process.

Interest

If payment of land rent is not received by the due date you will be charged interest on any amount that remains unpaid, on a compounding monthly basis. Interest charges that may be subject to change during the year are imposed on unpaid amounts on the 16th day of each month.

Online Payment

Contact Information

  • Discounted land rent and duty liability for land rent leases For all enquiries about the application for discounted land rent, annual review of eligibility for discounted land rent, and the duty liability on the purchase of a land rent lease contact the ACT Revenue Office.
  • Canberra Institute of Technology sessions Each potential lessee must attend a Canberra Institute of Technology (CIT) information session prior to applying for a land rent lease. To register for the CIT information sessions contact the CIT as follows: Email: infoline@cit.edu.au
    Phone: 02 6207 3188 Opening hours for phone contact (excluding ACT public holidays):
    Monday to Thursday: 9am to 5pm AEST
    Friday: 10am to 4:00pm AEST

Relevant links

For further information on other benefits available to home owners in the ACT, see Home Buyer Assistance.